EUR/USD forecast 16.08.2011

Worldwide recovery of stock exchange and bad US data hit the Dollar yesterday as it fell across the board against many currencies with over 1%, we are currently @ 1.4410-20 support level and we have formed something like a flag formation - but not clear yet. Today is the Merkel-Sarkozy meeting to discuss the debt problems, if they reach agreement for future actions EUR will rise to 1.4520 today. If not - then a fall to 1.43 again. Market is calm at the moment i'm waiting and do not open positions in any direction. GOLD rejected testing of 1720 and is ready to destroy the H&S figure on H4. Watch for close above 1780 - then attack of all time high follows. EUR bull are a little bit exhausted, we have to wait a little bit more before doing anything.

This morning there was an information that BoJ has made an intervention, but still unconfirmed. Stay tuned fro more updates during the day. My recommendation is to stay away and wait for the EUR to determine direction.

It's difficult to say where EUR is going, all depends on meeting in Paris today, it is expected an agreement to be reached,so this will help EUR in the afternoon. But recent drop may extend to 1.4330, so be carefull. Uncertainty grows as well as the price of GOLD, all look for a place to hide - bad US data and debt problems in EU - what left then - nothing than GOLD. But don't take LONGS on GOLD now, drops to 1750 still are possible,wait for daily close above 1780 to enter LONG otherwise drops still possible.

Positions update: small LONG @ 1.4390 TP some 100 pips above - opened

My position is not well opened again (damn) it's good to have long @ 1.4340 or 1.4370 at least.

Analysts from Dow Jones think that the pair may decline later today because they don't think any important decision to be taken today. I may add the bad data from Europe which shows Europe is facing another economy decline.

Testing of the 4-month resistance line @ 1.4440 was unsuccessfull and now EUR targets 1.4330 and then 1.4260. If it breaks up targets will be 1.4520 and then 1.4700, but this is less possible - Commerzbank

EUR has a potential to go up to 1.47 till the end of September - Bank of Australia